Garett Jones  

How do you Sustain the Second Freest Economy in the World?

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In an excellent Singapore econ-travelogue, Scott Sumner writes:

My theory is that leftists don't really mind a place where income is unequal, they don't like places where income looks unequal. 

This is close to what pioneering blogger Mickey Kaus has been pushing for since, oh, the invention of the New Democrats.  I've never read his 1992 book The End of Equality, but after 13 years of reading Kausfiles I think I've got the main idea: Higher income inequality is inevitable, let's get used to it and let's respond by increasing civic equality, social equality.  His idea is to tinker with the state so that people feel equal in civic life even if money inequality is high.  In his view, that feeling is a genuine good; I'd emphasize that the sensation of civic equality may prevent voters from killing the goose that lays the golden eggs.  

A few of Kaus's ideas: Boost the relative status of the work ethic; create universal health care; be skeptical of Wagner Act unionism since it's insider-friendly and since it leads to awful cars.  A veneer and sometimes a substance of equality in public, decadence for the rich in the privacy of their Village brownstones.  

Here's a sentence Kaus likes from Reagan's 1992 GOP convention address:

Whether we come from poverty or wealth ... we are all equal in the eyes of God. But as Americans that is not enough--we must be equal in the eyes of each other.

And on Singapore's Mass Rapid Transit system, we all appear equal. 


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COMMENTS (14 to date)
John Thacker writes:

OTOH, Kaus is fairly anti immigration, believing that it leads to greater inequality in this country.

Garett Jones writes:

@John:

Is that an OTOH or a therefore? Geese, eggs, public choice is everywhere, etc.

Doug writes:

From a material standpoint the poor really are not that unequal with the rich in the US. As many have pointed out before, the worst thing about being poor in America is having to live around other poor Americans.

The Hassidic Jews in Kiryas Joel, NY constitute the poorest community in the US. Would you rather live there or Ward 9, New Orleans? In terms of "unaesthetic inequality" if the poor in the US adopted the behavior of Hassidic Jews, Mennonites or Fundamentalist Mormons then being poor in the US really wouldn't appear that "ugly" at all. Certainly slums in the traditional sense, as dangerous and poorly maintained areas would cease to exist.

The issue isn't the actual material inequality, the issue is cultural inequality. As Charles Murray demonstrated the upper class still lives in 1950s America, while the lower classes are increasingly criminal, lazy, promiscuous, and impulsive.

If leftist policy offers solution to these problems, they certainly don't seem to believe it. All the left seems to push is the belief that poverty is wholly a product of life circumstance and that character, servility and hard work as an antidote is a farce pushed by Uncle Toms.

Singapore demonstrates a way to fight the problem of lower class culture: 1) Adopt a zero tolerance policy towards crime, including harsh punishment and aggressive persecution of even minor crime (like graffiti). 2) To the extent that welfare exists, use it to promote nuclear, two-parent, working, stable families with low fertility, rather than single motherhood, unemployment, and endless children. 3) Use the state educational and propaganda organs to promote middle-class values. 4) Accept lots of immigrants, but heavily filter for those conforming to traditional middle-class values.

To say the above does not exactly qualify as "PC." I don't really see the NYT running articles addressing these themes anytime soon. If you can imagine the following platform coming out of any American political organization to the left of the John Birch society, please let me know.

MikeP writes:

It's gotta be a therefore. There's already enough inequality to paper over: liberalized immigration would only import more of it!

ajb writes:

Sumner points to Singapore's "liberal" attitude to immigration but that only works because Singapore as Doug notes is not PC. I suspect a very Singaporean style immigration policy that includes credible ability to kick out low wage immigrants and their children even after 20 years (and especially illegals) as well as to favor high talent groups and groups from compatible cultures would find favor even among many restrictionists in the USA.

Sonic Charmer writes:

There is a problem with trying to make people 'look more equal'. Rich people will still want/need to feel richer, and that impulse doesn't go away. So if rich people look around and see that others don't 'look' less rich than them, this creates a psychological incentive to find other forms of (wasteful) conspicuous consumption, to advertise their 'rich' status in other ways that haven't yet been successfully leveled by Kaus's 'look-equal' state.

We see a very clear example of this in college tuition. Almost 'everyone' can go to college via student loans etc., as a result of which rich people endlessly bid up the 'top' university tuitions and entrance requirements (paying for SAT-prep courses, agreeing to an ever-increasing imposition of parental involvement in the application process, etc.) to make sure their kids remain higher-status. Heck, we see this effect in *preschool* admissions, nevermind college. Now, people notice all that, and complain about it, and try to find solutions. But inevitably the more you try to smash away this purchaseable high-status, the more rich people will scramble to find other, yet more wasteful, ways to purchase high-status, resulting in a neverending arms-race that is good for no one.

On a more lighthearted note, some of the 'stuff white people like' culture can be read as attempts by the upper middle class to 'conspicuously' advertise their high status in the absence of easily-available high status markers.

So even if Kaus & you are right that making sure people 'look equal' is a public good and/or has political benefits, there is also a wasteful side of the equation that results. It can be debated which effect, the positive or the wasteful, is dominant, but I definitely don't see a cut-and-dried case either way.

Costard writes:

Sonic Charmer - is there any value in such a negative and machinistic view of human nature? I could just as easily say that blog discussions are pointless, since people will still want/need to feel smart, and when proven wrong they will only find some greater vacuity to pretend to be knowledgeable about. If for some reason your conjecture were right, it would apply to all of us and all human endeavors equally, and there would be no point to worrying about any of this in the first place since All Is Vanity.

Garrett - notwithstanding Scott's theory of what motivates people he (by admission) doesn't understand, what's the basis for this assumption of motive? Jealousy is an emotion, while fairness is closer to reason, and a much better basis for argument. Which is more likely to produce class prejudice? The kings of France were conspicuously rich for a thousand years; it wasn't until this inequality was perceived as unfair - unmerited - that heads rolled.

Perhaps the anger towards the wealthy in this country has less to do with what they buy, than with the fact that so many of them live in the environs of D.C., or the idea that their money comes from something other than personal merit. To the extent that corruption exists, do we have any business trying to hide it? Would it smell any better behind a curtain?

Sonic Charmer writes:

Costard -

Kaus/Garrett are implicitly raising the spectre that without the government taking steps to 'make people look equal', people will react in bad/negative-externality ways (voters demanding bad economic policies, or worse). I am merely making an analogous point: that if the government *does* take such steps, then people will *also* react in bad ways (pursuing conspicuous consumption and the like). I can understand arguing or disputing what I am saying, but to insist it has no 'value' is to say this discussion has no value.

Part and parcel of *any* economics discussion inevitably involves asking the question How People Will React to this or that. Or it should, anyway.

Tom West writes:

1) Adopt a zero tolerance policy towards crime, including harsh punishment and aggressive persecution of even minor crime (like graffiti).

Given the current unmatched incarceration rates in the US and its almost unique severity in punishment, just how high a level of prosecution do you see as necessary?

Execution of jaywalkers? :-)

John Smith writes:

To Tom West:

Speaking as a born-and-bred Singaporean, I would say that you could easily reduce overcrowding by eliminating 20% of the prison population.

I point you towards our proud achievement of having the world's highest per capita execution rate.

Let the criminals fear the government more than they crave easy gain. Mass executions is a good way to start. Texas is soft by Singapore standards.

[And no. I am not being ironic in this post]

John Thacker writes:

Garrett:

It's an OTOH in the sense that I might approve of some of his other ideas more than that one. But certainly in another sense it's a Therefore that follows from his reasoning and adopting that as his primary goal. (Together with a nationalism that means he's not concerned with social inequality across different nations so much.)

Tom West writes:

To John Smith:

You win - I couldn't possibly satirize your post.

I will simply say that societies that feel it necessary to eliminate significant portions of their population don't have a great track record.

Floccina writes:

Doug has said it well but I will give my own thoughts:
I have long believed and said that Democrats seemed more concerned about aesthetics than real help for the poor. They seem to want to turn poor people into middle class people, that is why they are so concerned with obesity, treatment for drug use, schooling etc.
If some subset of the population shows by their actions that they think it is more desirable to allow their children to enjoy life than to set them up for later gains who are democrats of all people to take their children and put them in preschool?

John Smith writes:

To Tom West:

Indeed. We lie on the extreme right (on social affairs, excluding religion), when seen from the viewpoint of the West.

Seems that our track record speaks for itself though, no?

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